Deputy Prime Minister and Foreign Minister Ishaq Dar has strongly voiced his feelings against supporters of a free-floating exchange rate and said the Pakistani rupee (PKR) should be at Rs. 235-240/$ today, based on Pakistan’s Real Effective Exchange Rate (REER).

Speaking at a seminar by the Pakistan-China Institute, Dar argued that devaluing the rupee harms 92 percent of the economy that does not participate in exports which worsens inflation and economic instability.

Dar denied the concept that currency depreciation boosts exports given Pakistan’s lack of exportable surplus. He also mentioned the disparity between Pakistan’s Consumer Price Index (CPI)-based inflation of 6.9 percent and a policy rate of 17.5 percent. He said the next Monetary Policy Committee (MPC) meeting could lower this rate gap as no rationale supports the current levels.

Dar reaffirmed his past beliefs that Pakistan would not default while its debt-to-GDP ratio was comparatively lower than that of the US, UK, and Japan.

The former finance minister addressed economists in attendance, including Dr. Ishrat Hussain, a supporter of the free-float approach, reiterating his own stance in favor of a stable exchange rate. He added that depreciation has only worsened inflation over recent years and suggested Pakistan look to China’s economic strategies as a model for development and stability.